Topic: US could run out of cash as soon as Dec. 15, Janet Yellen warns - page 3. (Read 575 times)

The US is not in trouble.The US politicians are again creating some drama that nobody needs.
The US debt ceiling debate has become a normal thing,which happens in the end of every year,since the Obama administration,if I remember this correctly.
Both parties will settle some kind of agreement and the debt ceiling will be raised again.I assume that before that agreement,there will be some accusations between both democrats and republicans,so the drama seeking mainstream media can be happy,but there will be a compromise in the end.
The USA cannot go default because they have a money printing machine and US dollar is the global currency.

The silly thing is, the US can print as much money as it likes (within reason) because it has a rather unique power of being the foremost reserve currency of the world and that gives it a lot of perks. If it prints more money it can devalue any debt denominated in US dollars, which of course is what the US government sells to other people all the time. So at present the only thing that would cause this calamity to happen is the grand standing of politicians of both parties who are trying to squeeze various concessions but could great amounts of unnecessary stress to lots of people with these doomsday headlines and both sides trying to weaken the other but never actually solving the problem - which is runaway spending habits, often on useless junk like overly generous military spending.

It is true that some responsible people have been warning about this possibility for a long time, however the general population and the politicians like always are misinterpreting the signals.

This is similar to when you get sick, at first the symptoms are mild, however you still feel fine and you are not really that affected by the symptoms, but you receive some early warnings from your family members about seeing a doctor but you do not listen, then it gets worse but since it has not killed you and so many other diseases you got did not kill you then you assume this is going to be the case as well, eventually things get even worse and you finally go and see a doctor which tells you it is too late to do anything, you complain of course but the doctor states this could have been easily solved if you went and see them immediately.

This is what is happening with the US economy, since the crash has not happened despite the warnings politicians believe it will never happen, but it will, and the longer the delay the harder the crash.

Pretty scary that they might go into some sort of depression all over again because that kind of debt defaulting will only result with that one thing. I don't see how it's going to affect bitcoin or crypto in general though? I just can't piece it together. Now that I think of it, the lifespan of an empire is around 250 years before a collapse and I think that USA is around 246 years old so...

The reptilian overlord Janet Yellen at her best. I laughed quite a lot after hearing about the possibility of the US "running out of cash"... Do you guys know how much cash did they printed in the last 2 years? The M1 monetary supply for US Dollar went up by almost 3 times in the past 2 years. Now she wants to print more money? I am not sure about what happened to the tens of trillions worth of banknotes that were printed during the last two years. All that cash vanished without a trace? And now they are running out of cash?

Quite a shocking news, what baffles me is that despite this information being accessible to the governmental bodies, despite the dangers that they were warned about since the time of Trump, they still continue to do things to make the value of not just the dollar or the government, to make the value of the whole country, go down, plus it would be so sudden that any recovery might take a lot of time. US is also loosing a lot of workers, a lot of employees, therefore their economy might not be able to sustain itself.

The debts which are already huge would just increase more and more, what I think is that the financial ministry is not doing their job right, if the government still continue to make these decisions despite them having troubles with printing more money than recommend.

The public debt is already 28.91 trillion more than it has ever been before. Hopefully the government is able to reform their decisions before it's too late.

Hasn't this happened already in the past multiple times?

The fiat system is irretrievably broken and this is just one of the symptoms. It's not the root cause of its issues like Yellen makes it seem.

The more the debt ceiling gets lifted, the more money is going to come into circulation and therefore inflation will pick up. Our only chance is holding cryptos as a hedge.

I believe that it is mainly ineffective method of spending the money that they get. They collect so many taxes every single year and in the end they always spend it on the wrong things. For some weird reason, Americans believe that if they are not insanely powerful when it comes to military, then they are going to be doing horrible.

Even the idea of "thanks for your services" to every single soldier they see is a weird one. What service really? The last justified war happened 70 years ago, all the soldiers you see actively working either went to another nation to kill them, or they have been stationed in their nation and did basically nothing, this cost the whole nation probably 20+ trillion dollars in the past 2 decades, probably more. So I am pretty sure if they focused on making their own nation better instead of focusing on killing other nations, maybe they wouldn't be this much in debt.

Even though I'm not a US citizen, I remember very well how Joe Biden's policies were at the beginning after he was sworn in. Several controversial regulations were passed, ranging from taxes to economic stimulus with a very large value as well as a focus on infrastructure development. As at the beginning, I thought that the economic crisis would appear soon, but it has already begun to be realized. The policy solution that can be done is to actually implement a tapering off policy, as well as other contractionary monetary policies.

This is good for Bitcoin, but bad for the global economy. Knowing that the USD is the reserve currency of the world, anything that affects its value (like inflation) will have a negative impact over other countries worldwide. This is not to my surprise, since the pandemic severely affected the American economy. Continuous government spending and money printing will only make matters worse in the long run. Crypto will be put to the test, as the current banking system nears the edge of collapse. Bitcoin "hodlers" will inevitably gain more purchasing power, as the cryptocurrency itself is the antithesis of inflation. Who knows if the decaying global economy opens a path for Bitcoin to become the world's next reserve currency? Just my thoughts

The only outcome I see is the increase in inflation.

Increasing their debt ceiling is the result of ineffective management of loans, and yet we still perceive the USA as a powerful nation when they are now struggling with paying their debts. I feel that one country will rule above the USA as in the long run they will not be able to keep their problem and people will lose faith in USD, but anyway, it's good for crypto for sure.

It sounds bad, and it might look like the US is in trouble, but I'm with those pointing out that the US will get away with this. No other country could allow it, but given the significance of the USD worldwide and firm economic standing of the US in the world, they'll just print more or do something like that, and who knows, maybe the inflation won't even be that bad as a result because, again, dollar is in such high demand worldwide and so much other fiat relies on it as a reference point of stability, against which other coins' values are measured. One day, it will backfire, but not this time. US is still too powerful. But I do believe that the poor will be affected more than most, of course, and in this sense, it can be devastating for the US even this time around.

I only know the situation back home and where I live now, and yeah, I can see prices for basic food items already notching up. I'm not driving but fuel's going to bite in winter anyway, my energy provider went bust, so my long-term contract's out the window and the new provider already is giving me very painful estimates. I don't spend much on luxury or anything else but I do cook almost daily so the markups are quite evident.

I always said jokingly 1 million dollar Bitcoin's actually possible when the US dollar goes to shite but yeah, all this talk of default and US economy and dollar worst-case scenarios won't happen in our lifetime. Not because it's not heading there but because those in charge won't allow it.

Still many people are reluctant to have only fiat or the so called safe heaven as they are living only in the delusional world where fiat is king but they are ignoring the rising inflation and cannot spot the corrupt government policies and yes they are still unaware about usage of bitcoin that could free them from the chains of centralized slavery but this is social trap and they are unknowingly becoming victims and puppet of the government and living an ordinary life which tells btc is not good and bad for environment but the so called paper money is good because it's government legal tender and accepted by all.The percentage will increase but it might be too late till they realize this fact.

So it really does not matter if the debt ceiling is increased or not... the outcome will be the same. The government cannot honor it's commitments and the tax payers become the safety net again.    The only negative impact will be market sentiments... but who will worry about that? (The US are one of the strongest economies in the world and they have bounced back from several "near" market crashes before)

Also if all fails... WAR is the solution. These wars give them unlimited funds to stimulate the economy and to create jobs for the unemployed. (Cannon fodder for the rich and powerful) 

It is a bunch of theatrics for sure.

I doubt that this will actually transpire into anything meaningful.

They will eventually raise the debt ceiling because everyone understands what is at stake for the U.S. based fiat currency system if it doesn't happen. But it'll certainly happen slowly, and contingent on demands from both sides.

Considering the ceiling was raised during Obama and then Trump and now probably on Biden, it is just a regular part of life for USA government. They never really covered the nation properly and they never did a proper taxation so it is quite common for them to not have enough funds to compete with anything else.

I get that some people may want to see USA doing better but it is just not possible at this moment. They are spending money at a rate even socialist countries can't tax enough. I am one of the belief that rich people should be taxed a lot more, specially with their stock gains, but even that won't be enough to cover all these expenses. It means instead of trying to find funds, they need to cut expenses.

In a nation that spends 79 billion on education and 750+ billion on military, maybe it is time to cut that down. In a situation where 1 trillion dollars such a huge amount, if they cut 500 billion out of that military then it would be paid back in 2 years, all of pandemic would be covered in 6-8 years.

The United States faced the same problem about ten years ago, but this time things seem more serious. At that time during the Obama administration, Standard & Poor's (the largest credit rating company in the world) lowered the credit rating of the United States from (AAA) rating to (AA+). And the American administration faced severe criticism because this reduces the confidence of investors in the United States of America, now the situation seems much more dangerous with the spread of the Corona virus and the many crises that the tired American economy suffers from, the main problem in my opinion is that the collapse of the American economy will lead to the collapse of the global economy as happened in a crisis Mortgage in 2008, which threatened the entire global economy at that time to collapse. The main reason is the centralization The link of the global system to the US dollar and the US economy clearly shows the necessity of moving to a decentralized global economic system that Satoshi laid his foundations with the invention of Bitcoin.

Understanding US Debt is one of my aspirations.

When you talk about your usual run-of-the-mill, third world country defaulting on its debt, the meaning is pretty much straight-forward. Countries have debt from International institutions or other countries on which they need to make regular interest payments. Failing to pay up amounts to default.

Now, who does the US owe fund to? To its own public, it seems.

This makes it pretty difficult to figure out what exactly does this mean. Some of the biggest creditors are the retirement and social security funds. This is because common people keep funding these by putting apart of their continous savings into it. These "Pension funds" are essentially cash cows. Thus, they buy up bonds from the government in return of the cash.

Now if the US govt defaults, guess who loses? These funds. Because then the debt held by them will lose its value and it'll be a situation of their funds having made a "bad investment" by investing in US Bonds.

Isn't that neat? The Govt gets to fund itself from people's savings. If it defaults, its the people's savings that gets hit.

On further reading, this gets funnier. Apparently the US can only default on its debt, if it breaks its debt ceiling. The Congress votes to increase this ceiling. If it can't do it with bipartisan agreement, that will mean a debt default. This is supposed to spook the markets and lead to a financial crisis. The only threat is the "sentiment". Nothing else. This essentially means that as long as USD is surmount, nothing bad can happen.

The situation this time around is a little bit different with China starting to gain ground. Even then, I don't think any of the major financial institutions, pension funds and banks that hold US debt are ever going to get spooked and move their investments elsewhere. So, these headlines are little more than click-bait; AND a trick to make you learn about this crazy system.

While I love America, it seems that it has become so polarized around the extremes - it is at it's worst now with politicians trying to score points and maintain their own career salary instead of doing what is best for the country. The Republicans spent their last term trying to build a wall instead of focusing on the crumbling state of roads and bridges, now they're acting like babies because it creates good publicity for the democrats. I don't think the Democrats are angels at all, but at least they are not building their political base on hatred and division. It's a sad state of affairs when democracies only revolve around two political parties because it leaves so little room for compromise or change.